At the beginning of November, the Treasury announced that there would be an extension to the Furlough Scheme (or Coronavirus Job Retention Scheme) which was due to come to an end on 31st October 2020. We have now been provided with further guidance on the new extended Furlough Scheme and a new Treasury Direction has been issued.

Some of the headline points are as follows:

  1. The new Scheme has been extended to March 2021. However, it is likely that the current levels of support (i.e. 80% of salaries at a cap of £2,500) will come to an end on 31st January 2021. Employers may therefore be asked to contribute to payments in February and March, but we simply haven’t been given this information yet.
  2. It appears employers will still remain responsible for their relevant National Insurance/PAYE and pension contributions.
  3. Employers will still have the choice of topping up their furloughed employees’ salaries to 100% should they choose to.
  4. There is not a maximum number of employees who can be furloughed under the new Scheme.
  5. Neither the employee nor the employer needs to have used the Furlough Scheme previously to be eligible to use the new Scheme.
  6. Employees must have been on their employer’s PAYE payroll by 23:59 on 30th October 2020. It appears, that this will mean the employer should have provided HMRC with a Real-Time Information submission notifying payment for that employee on or before the 30th
  7. From the 1st December 2020, the Government has stipulated that the Scheme will not cover an employer’s payments for statutory or contractual notice should a furloughed employee be working their notice period.
  8. From the 1st December 2020, the Government is proposing to publish information on employers who have made a claim (only claims from 1st December onwards). The objective of this is to deter fraud. The information they suggest will be provided is: –
    1. The Employer’s name;
    2. An indication of the value of their claim; and
    3. The Employer’s Company Number (if applicable).
  9. The Job Support Scheme which was due to come into effect from 1st November 2020 and replace the Furlough Scheme has been postponed until the newly extended Furlough Scheme has come to an end.
  10. The Job Retention Bonus, which was a £1,000 one-off taxable payment to the employer for each eligible employee that had been furloughed and kept in employment until 31st January 2021, has been withdrawn. We do not know whether it will be replaced by a similar scheme when the extended Scheme ends.

The most recent Government guidance can be found here: –

It should be noted that guidance from the Government changes on a continuous basis due to the current unpredictable nature of the economy and the Coronavirus pandemic. As such, we would always suggest that you seek a professional to ensure you get the most current advice possible.

We will continue to provide updates on both the Furlough Scheme and Job Support Scheme, however, should you have any questions, or need assistance, then please don’t hesitate to contact a member of our Employment Team on 0116 289 7000.

NB: We can only confirm that this update is accurate at the date of publishing.

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